Extra_Problems_2 - ECON 410.502 Macroeconomic Theory Spring...

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Page 1 ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma Extra Problems #2 Notice : (1) This set of extra problems contains 25 multiple-choice problems and 4 analytic (short-answer) problems. These problems are not homework and will not be graded. The aim of these problems is to provide you with additional exercises. (2) I will give solutions of the assignment and the “extra-problem” set after the due date.
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Page 2 Problem 1~25: Multiple choice problems Please choose your answer and circle the corresponding capital letter (A, B, C, D) 1. When f ( k ) is drawn on a graph with increases in k noted along the horizontal axis, the: A) graph is a straight line. B) slope of the line eventually gets flatter and flatter. C) slope of the line eventually becomes negative. D) slope of the line eventually becomes steeper and steeper. 2. In the Solow growth model of Chapter 7, where s is the saving rate, y is output per worker, and i is investment per worker, consumption per worker ( c ) equals: A) sy. B) (1 – s ) y. C) (1 + s ) y. D) (1 – s ) y i. 3. If capital lasts an average of 25 years, the depreciation rate is ______ percent per year. A) 25 B) 5 C) 4 D) 2.5 4. In the Solow growth model, if investment exceeds depreciation, the capital stock will ______ and output will ______ until the steady state is attained. A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase 5. In the Solow growth model of an economy, with a given production function, depreciation rate, no technological change, and no population growth, a higher saving rate produces a: A) higher MPK in the new steady state. B) higher steady-state growth rate of output per worker. C) higher steady-state growth rate of total output. D) higher steady-state level of output per worker.
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Page 3 6. In an economy with no population growth and no technological change, steady-state consumption is at its greatest possible level when the marginal product of: A) labor equals the marginal product of capital. B) labor equals the depreciation rate. C) capital equals the depreciation rate. D) capital equals zero. 7. If an economy is in a steady state with no population growth or technological change and the marginal product of capital is less than the depreciation rate: A) the economy is following the Golden Rule. B)
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This note was uploaded on 03/09/2010 for the course ECON 134 taught by Professor Ab during the Spring '10 term at A.T. Still University.

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Extra_Problems_2 - ECON 410.502 Macroeconomic Theory Spring...

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